The gas price debate

Houston Chronicle:

As average gasoline prices approach the $4-mark nationally, lawmakers, interest groups and the Obama administration are debating ways to ease upward pressure on prices for consumers through energy policy.

Gasoline prices have steady risen since the New Year, and in some areas, they are quickly approaching the $4-mark again. Nationally, the average prices of gasoline has risen nearly 20 cents, settling at $3.57 as of today. Analysts have predicted the average price could hit the $4-mark by Memorial Day.

The national debate, however, isn’t centered on what’s causing the rise for consumers so much as it is on possible solutions to slow the price increase.

Republicans and industry groups are fighting regulations and touting more oil-and-gas production that could increase supply and drop crude-oil prices, which many analysts and experts have fingered for the rising gas prices. Environmental and liberal advocates say more renewable energy and fuel-efficiency standards could cut oil dependence and also reduce the burden on consumers. Some Democrats, meanwhile, suggest tapping the Strategic Petroleum Reserve.

Refiners right now have to pay $3 — roughly 84 percent of the current gallon of gas price — just to cover the cost of crude on global markets and gasoline taxes, said John Felmy, chief economist with the American Petroleum Institute, the main oil lobbying group.

While more refinery output could cause a drop in the price in the short term, the long-term solution is to boost U.S. oil production, Felmy said.

“More U.S. barrels on crude markets would help drive down crude costs,” Felmy said.

The industry group has criticized the Obama administration’s energy policies that the API claims limits companies’ ability to lease and drill in offshore areas and on federal lands.

Felmy reaffirmed the group’s position on those issues and also restated API’s support of the Keystone XL pipeline, which could bring 700,000 barrels of crude a day from  Canada to the U.S.

“The administration has not stepped up to the plate on any of this,” Felmy said.

Last week, the House passed a bill aimed at approving the 1,700-mile pipeline, expanding oil and gas production in new offshore areas and opening a small portion of the Arctic National Wildlife Refuge to drilling.

Rep. Doc Hastings, R-Wash., chairman of the House Natural Resources Committee, has called the bill “an action plan” to cut gasoline prices in the face of what he views as counterproductive Obama administration policies.

Democrats have panned that bill as an environmentally destructive measure that likely wouldn’t have any near-term impact on gasoline prices.

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That would be the same Democrats who 10 years ago said it would take 10 years to get this crude to market.  That would be the same Democrats who are always looking for an excuse not to develop domestic oil and gas prospects.  The same ones who supported the administrations moratorium on drilling off shore.  The Same Democrats who still don't want to drill anywhere anytime on federal control properties.

It is past time to ignore the negative nabobs of no energy.

I am not part of any industry group.  I just recognize the importance of market forces on the price and want to stop driving up prices by restricting supply.  We are already seeing how increasing supply drove down the price of Natural gas.  We need to do the same with oil by opening up all areas for drilling.  I think we are going to have to defeat Democrats to do it.  They are the major roadblock to energy development.